High-speed trading probe underway, Holder reports

Attorney General Eric Holder, left, accompanied by Transportation Secretary Anthony Foxx, announces a $1.2 billion settlement with Toyota over its disclosure of safety problems, Wednesday, March 19, 2014, during a news conference at the Justice Department in Washington. (AP Photo/Susan Walsh)

Attorney General Eric Holder, left, accompanied by Transportation...

The Department of Justice is investigating high-frequency stock trading to see if any of the practices violate insider trading laws, U.S. Attorney General Eric Holder said Friday.

Brokerage firms use high-frequency trading to get a jump on their competitors.

Powerful computers analyze market information and then execute buy and sell orders for stocks within a fraction of a second.

"The department is committed to ensuring the integrity of our financial markets - and we are determined to follow this investigation wherever the facts and the law may lead," Holder told a House hearing in prepared remarks.

The practice has come under increasing scrutiny in recent months. The FBI confirmed this week that it has been investigating high-frequency trading firms for about a year. The Wall Street Journal reported that investigators were examining the practice of placing a group of trades and then canceling them to create the false appearance of market activity.

New York Attorney General Eric Schneiderman has also campaigned against high-frequency stock trading, saying it gives firms an unfair advantage and erodes public confidence in the stock market.

The Securities and Exchange Commission is also carrying out a number of active investigations into the practice, SEC Chairman Mary Jo White told the House Committee on Appropriations earlier this week.

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